On October 2, 2025, the U.S. Tax Court released two significant opinions in the consolidated cases involving the shareholders of Hobby Lobby Stores, Inc. (The David and Barbara Green 1993 Dynasty Trust, et al. v. Commissioner). The first, a reviewed opinion by the full court (Green 1993 Dynasty Trust v. Commissioner, 165 T.C. No. 7), addresses complex substantiation issues for noncash charitable contributions and the application of various Code sections governing deductions for trusts. The second, a memorandum opinion (Green 1993 Dynasty Trust v. Commissioner, T.C. Memo. 2025-100), focuses on the procedural requirements for penalty assessments under I.R.C. § 6751(b) and the reasonable cause defense for valuation misstatement penalties.

In a significant ruling for nonprofit advocacy organizations, the U.S. District Court for the District of Columbia has held that the standards applied by the Internal Revenue Service to determine eligibility for § 501(c)(4) tax-exempt status are unconstitutionally vague. In Freedom Path, Inc. v. Internal Revenue Service, et al., (USDC DC Case No. 20-cv-1349 (JMC)), the court granted partial summary judgment to the plaintiff, finding that both the Treasury Regulation and the IRS Revenue Ruling used to deny its application transgress the heightened vagueness standard applicable to civil regulations affecting First Amendment speech. However, the court stopped short of granting Freedom Path § 501(c)(4) status, finding that neither party had proposed a constitutionally permissible alternative standard grounded in the existing statutory and regulatory framework.

The Eighth Circuit Court of Appeals, in 3M Company, and Subsidiaries v. Commissioner of Internal Revenue, has reversed a closely divided U.S. Tax Court, holding that the Internal Revenue Service (IRS) lacks the authority under Internal Revenue Code (IRC) § 482 to allocate royalty income to a U.S. parent company that its foreign subsidiary was legally prohibited from paying under foreign law. This significant decision, one of the first to apply the Supreme Court’s holding in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), reaffirms the "dominion and control" standard established in Commissioner v. First Security Bank of Utah, N.A., 405 U.S. 394 (1972).

On October 2, 2025, the Department of the Treasury and the Internal Revenue Service (IRS) issued final regulations (TD 10034) that significantly alter the interest capitalization rules under Internal Revenue Code (IRC) § 263A(f) for improvements to designated property. The regulations primarily focus on eliminating the complex "associated property rule," updating the definition of an "improvement," and clarifying the treatment of "mid-production purchases". This article provides a technical overview of these changes for tax practitioners.

The Department of the Treasury and the Internal Revenue Service (IRS) have issued Notice 2025-53, providing another round of tax relief under § 7508A of the Internal Revenue Code for individuals and businesses affected by the ongoing terroristic action in the State of Israel. This notice extends previously granted postponements and establishes a new relief period, offering crucial deadline extensions for a wide range of tax-related acts. For practitioners with clients impacted by these events, understanding the legal authority, scope of relief, and interaction with prior notices is essential.

The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have issued two significant pieces of interim guidance, Notice 2025-46 and Notice 2025-49, addressing the Corporate Alternative Minimum Tax (CAMT). This guidance responds to numerous comments received on the proposed regulations (REG-112129-23) issued in September 2024 and is intended to reduce compliance burdens and provide clarity on complex areas of the CAMT. The forthcoming proposed regulations are expected to incorporate rules similar to this interim guidance, on which taxpayers may rely immediately.

The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have released Notice 2025-50, providing eagerly awaited guidance on provisions introduced by the One, Big, Beautiful Bill Act (OBBBA), Public Law 119-21, 139 Stat. 72. This notice specifically addresses two key areas amended by the OBBBA: a modified "substantial improvement" test for property in certain Qualified Opportunity Zones (QOZs) and the definition of a "rural area" for purposes of applying this new test. The guidance is crucial for practitioners advising clients with investments in Qualified Opportunity Funds (QOFs) that hold property in designated rural QOZs.

As seasoned practitioners, we are all too familiar with the annual drama surrounding federal appropriations and the potential for a government shutdown. This year is no different, with the September 30, 2025, deadline looming. However, the IRS contingency plan for Fiscal Year 2026, released on September 29, 2025, reveals a significant and welcome change from past shutdowns, thanks to the Inflation Reduction Act (IRA). Here’s what you and your clients need to know.

On September 30, 2025, the Treasury Department and the Internal Revenue Service (IRS) took a significant step by withdrawing two comprehensive sets of proposed regulations issued earlier in the year that would have substantially altered the landscape for corporate separations, incorporations, and reorganizations. The first set of proposed regulations, REG-112261-24, provided detailed substantive rules under Internal Revenue Code (the "Code") sections 355, 357, 361, and 368. The second, REG-116085-23, introduced extensive multi-year reporting requirements for corporate separations. The withdrawal came after the IRS received several critical comments from the public.

In conjunction with this withdrawal, the IRS issued Rev. Proc. 2025-30, which supersedes Rev. Proc. 2024-24 and largely reinstates prior procedural guidance for taxpayers seeking private letter rulings (PLRs) on divisive reorganizations. This move signals a return to a more established, case-by-case approach to complex transactions, particularly those involving the satisfaction of distributing corporation debt. This article provides a technical overview of these developments for tax professionals.

The Department of the Treasury and the Internal Revenue Service (IRS) have once again adjusted the user fee associated with obtaining or renewing a Preparer Tax Identification Number (PTIN). In a dual issuance, the agencies released both interim final regulations (T.D. 10035) and a cross-referencing notice of proposed rulemaking (REG-108673-25), effectively reducing the IRS portion of the fee from $11 to $10 per application or renewal. This adjustment, while minor in amount, is the latest development in a long history of litigation and biennial reviews concerning the statutory authority for and calculation of the PTIN user fee. For practitioners, understanding the legal framework and the IRS’s evolving cost methodology is crucial for appreciating the regulatory landscape in which we operate.

The distinction between employee and independent contractor status remains a cornerstone of tax practice, impacting everything from payroll tax obligations to the deductibility of business expenses. A recent U.S. District Court case, Francisco J. Gil, et al. v. United States, provides a valuable application of the long-standing common-law tests used to determine worker classification. The court’s memorandum offers a clear, factor-by-factor analysis that reinforces foundational principles for tax professionals advising clients on this critical issue.

The U.S. Court of Appeals for the D.C. Circuit (In re: Sealed Case, CA DC, Case No. 24-1001, September 24, 2025) recently vacated a Tax Court decision (Whistleblower 8391-18W v. Commissioner, 165 TC No. 5, October 16, 2023) in a significant whistleblower award case, providing insights for practitioners representing clients before the IRS Whistleblower Office (WBO). The appellate court’s opinion hinges on the factual support within the administrative record required for a WBO determination, particularly when the WBO treats a whistleblower’s claims inconsistently across different taxpayers involved in the same scheme. This article will detail the case’s journey from the Tax Court to the D.C. Circuit, focusing on the facts, the legal analysis, and the key differences in judicial interpretation that led to the appellate court’s reversal.

The U.S. Tax Court’s recent memorandum opinion in Vincent J. Fumo v. Commissioner, T.C. Memo. 2025-97, provides an examination of constructive receipt, civil fraud, and the excise tax on excess benefit transactions under I.R.C. § 4958. The case, arising from the criminal conviction of a former Pennsylvania state senator, offers valuable insights for tax professionals on how the IRS and the courts quantify and tax benefits diverted from both governmental and tax-exempt entities. This article will explore the court’s analysis of the facts, legal principles, and conclusions in this complex case.

In a recent memorandum opinion, Jackson Stone South, LLC v. Commissioner, T.C. Memo. 2025-96, the U.S. Tax Court dismantled a syndicated conservation easement transaction, disallowing a deduction for one of the two easements at issue and drastically reducing the value of the other. This case provides a valuable technical review for tax professionals, covering issues from donative intent and baseline documentation to highest and best use (HBU) valuation and penalty application. The court’s detailed analysis reinforces critical substantiation requirements and offers a clear rejection of speculative valuation methodologies in the context of conservation easements.

On September 23, 2025, the Internal Revenue Service (IRS), in conjunction with the U.S. Department of the Treasury, announced in IR-2025-94 a significant operational change: the phasing out of paper tax refund checks for individual taxpayers. This initiative, marking the first step in a broader transition to electronic payments, is mandated by Executive Order 14247 and will begin on September 30, 2025, to the extent permitted by law. For tax professionals, understanding the specifics of this change, its legal underpinnings, and the guidance for taxpayers is critical for the upcoming filing seasons.

The Internal Revenue Service (IRS) recently issued Notice 2025-54, providing the 2025-2026 special per diem rates for substantiating business travel expenses. This notice, effective October 1, 2025, works in conjunction with the rules established in Rev. Proc. 2019-48 and is essential for tax professionals advising clients on accountable plan reimbursements and travel deductions. This article will analyze the new rates, their interaction with procedural rules, and the methodology the IRS uses to establish the high-low rates.

For tax professionals with clients in agriculture, managing the tax implications of weather-related events is a critical service. The Internal Revenue Service recently issued Notice 2025-52 on September 22, 2025, which provides an extension of the replacement period under Internal Revenue Code § 1033(e) for farmers and ranchers who were forced to sell livestock due to drought conditions. This notice works in conjunction with prior guidance established in Notice 2006-82 and offers crucial relief by allowing additional time to defer capital gains from these involuntary conversions.

In a recent memorandum opinion, Young v. Commissioner, T.C. Memo. 2025-95, the U.S. Tax Court provides a detailed application of the "hobby loss" rules under Internal Revenue Code (IRC) § 183. The case serves as a reminder for tax professionals of the rigorous, fact-intensive analysis required to defend a client’s claimed business losses, particularly when the activity involves elements of personal pleasure or recreation. The court ultimately sided with the Commissioner, disallowing substantial farm losses and upholding accuracy-related penalties against the taxpayers. This article will examine the facts, legal analysis, and key takeaways from the Young decision.

The Treasury Department and the Internal Revenue Service (IRS) have issued a notice of proposed rulemaking (REG-110032-25) providing critical guidance on the new income tax deduction for "qualified tips" under Internal Revenue Code (Code) § 224. This new deduction was enacted as part of the One, Big, Beautiful Bill Act (OBBBA). For tax professionals, understanding the nuances of these proposed regulations is essential for advising clients in tipped occupations. This article provides a technical breakdown of the proposed rules, including the legislative mandate for their issuance, key definitional provisions, the methodology for identifying eligible occupations, and applicability dates.

On September 17, 2025, the House Ways and Means Committee unanimously advanced two bipartisan bills aimed at improving tax administration: the "Fair and Accountable IRS Reviews Act" (H.R. 5346) and the "Tax Court Improvement Act" (H.R. 5349). For tax practitioners, these bills propose significant procedural changes concerning IRS penalty assessments and Tax Court judicial authority. Both bills have garnered support from groups like the National Taxpayers Union and the Small Business & Entrepreneurship Council.

These two tax administration bills have successfully passed the Ways and Means Committee with strong bipartisan support. However, their next challenge is to be scheduled for a vote on the House floor. Despite the committee’s broad approval, there’s no guarantee that House leadership will allocate time in the House’s schedule for these bills to be brought to a vote.